“With the exception of the proposed reductions in Medicare payment updates for institutional providers, the provisions of H.R. 3962 would not have a significant impact on future health care cost growth rates. In addition, the longer-term viability of the Medicare update reductions is doubtful,” the report said.

In other words, outside of Medicare payment cuts to hospitals, the bill doesn’t curb increasing health care costs. And even the Medicare payment cuts will be difficult to sustain.

The analysis is more bad news for Democrats, who are facing increasing criticism that their reforms don’t do enough to control costs. Republicans released the analysis and jumped on the news.

“This report confirms what virtually every independent expert has been saying: Speaker Pelosi’s health care bill will increase costs, not decrease them,” said Rep. Dave Camp, the ranking Republican on the House Ways and Means Committee. “This is a stark warning to every Republican, Democrat and Independent worried about the financial future of this nation. I hope my colleagues in the Senate heed CMS’ findings and refuse to rush ahead until any bill under consideration can be certified to actually reduce health care costs.”

I’m reading over the report and will update the post shortly.

Update: The 31-page report also analyzes the impact of a number of the House bill’s other policy proposals. After the jump, I’ve listed the most interesting ones, page by page.

Update2: House Speaker Nancy Pelosi's spokesman, Nadeam Elshami, offers this spin: "The report shows that our health reform bill will extend the life of the Medicare trust fund by five years – significantly longer than any proposal in recent years. Medicare actuaries estimate $100 billion more in savings than CBO from Medicaid and Medicare. In 2019, CMS estimates that our bill will cover 10 percent more of the population with less than a 1.3 percent increase in national health expenditures – that illustrates a bending of the cost curve."

Pg. 3 – “Most of the provisions of H.R. 3962 that were designed, in part, to reduce the rate of growth in health care costs would have a relatively small savings impact.” Translation: Things like wellness and prevention programs and reducing Medicare fraud don’t save much money.

Pg. 4 – Acknowledges that with so many unprecedented provisions, the report’s estimates are more uncertain than usual.

Pg. 6 – A public plan would cost 4 percent more than private plans because its utilization rules would not be as strict as the private sector.

Pg. 7 – About 3 million more people would get coverage through their employers. The report figures that about 15 million more people would gain employer coverage but 12 million would lose it because it would be cheaper for their employers to let them buy coverage through the public insurance exchange.

Pg. 7 – 18 million people will remain uninsured and choose to pay the fines for not carrying insurance rather than buy coverage.

Pg. 8 – The bill reduces Medicare payments to hospitals and nursing homes over time based on productivity targets. The idea is that by paying institutions less money, they will be forced to become more productive. But it’s doubtful that many institutions can hit those targets, which could force them to withdraw from Medicare, the report says.

Pg. 9 – By 2014, Medicare Advantage enrollment would drop 64 percent from 13.2 million to 4.7 million because of less generous benefit packages.

Pg. 9 – Over the next decade, the report estimates “a relatively small reduction in non-Medicare federal health care expenditures of $2.1 billion, all of which is associated with the comparative effectiveness research provision.”

Pg 16 – “The additional demand for health services could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, changes in providers’ willingness to treat patients with low-reimbursement health coverage.” Translation: A crush of newly insured patients could be a shock to the system.

Oh geez, this is going from bad to worse. If only Obama would have accepted several of the Republican proposals, like tort reform, buying across state lines, personal accounts, etc. He and the Democrats would have been heroes and gotten 99% of the credit. The bill would have been signed into law already. But instead they are getting too greedy and paying a big price for it. This will be a big mistake.

It is hard to believe that the impending release of this report and the almost certain conclusions it would contain were not behind the Speaker's efforts to sneak this bill through in the dead of night. However, if they knew the bill would not reduce the cost of health care, thereby making it more affordable to all, what was their purpose in pushing it so hard? I certainly have my belief. In any event, it was a misguided effort for which the Democrat party will pay for many years.

Mr. Frates, perhaps you should actually read the report. It explicitly notes that it does not take all revenue provisions, such as Federal and income taxes on "high income individuals," into account. Additionally, the report does not dispute the CBO's analysis that the overall bill would result in a net deficit reduction. Indeed, the report notes the CBO analysis: "The Congressional Budget Office
and Joint Committee on Taxation have estimated that the total net amount of Medicare savings
and additional tax and other revenues would somewhat more than offset the cost of the national
coverage provisions, resulting in an overall reduction in the Federal deficit through 2019." It's unfortunate that I, an everyday citizen, have to do the job that you're paid to do, Mr. Frates.

Another point: this report is not meant to be an assessment of OVERALL costs. Instead, it's a specific assessment of COVERAGE costs. Thus, it should not be very surprising that covering more people will cost more. That's common sense. Nevertheless, the report notes that the CBO has found that any increase in coverage costs will be offset by the generation of cost savings and additional revenue from high-income earners. Again, the report NEVER contradicts CBO's analysis (which took the entire impact of the bill into account, not just specific coverage provisions) that the NET effect of the bill would be a deficit REDUCTION.

Keep it up Obama. Keep digging the graves of our children deeper and deeper cuz they are going to have to bear the burden of your failed administration. YOU SHOULD BE ASHAMED OF YOURSELF. FIRST PACIFIC PRESIDENT MY ***. YOUR THE FIRST PACIFIC FAILURE.

@Jimbo: Sorry, if I took the initiative to actually read the report for myself and not take the word of a journalist who apparently has not read the report, has read it and doesn't understand it, or is deliberately distorting the information contained in the report.

Mr Frates,
The report explicitly states that it does not include cost reductions that have been assessed by the CBO. In fact, this report explicitly supports the CBO's estimate that the bill will reduce the deficit! This report's purpose is not to assess what the CBO did, but to look at costs - WITHOUT the costs reducing measures in the bill. Therefore, this should not be at all news except to illustrate the legitimacy of CBO's report. I.e., this emphasizes different estimates but SUPPORTS the overall estimates offered by the CBO. Please put this information in your updated report.

Mr Frates,
The report explicitly states that it does not include cost reductions that have been assessed by the CBO. In fact, this report explicitly supports the CBO's estimate that the bill will reduce the deficit! This report's purpose is not to assess what the CBO did, but to look at costs - WITHOUT the costs reducing measures in the bill. Therefore, this should not be at all news except to illustrate the legitimacy of CBO's report. I.e., this emphasizes different estimates but SUPPORTS the overall estimates offered by the CBO. Please put this information in your updated report.

Mr Frates,
The report explicitly states that it does not include cost reductions that have been assessed by the CBO. In fact, this report explicitly supports the CBO's estimate that the bill will reduce the deficit! This report's purpose is not to assess what the CBO did, but to look at costs - WITHOUT the costs reducing measures in the bill. Therefore, this should not be at all news except to illustrate the legitimacy of CBO's report. I.e., this emphasizes different estimates but SUPPORTS the overall estimates offered by the CBO. Please put this information in your updated report.

I thought Obama promised not to sign a bill that would not reduce the deficit or bend the cost curve downward. If so then why did Pelosi struggle so to get the House version passed. But I guess they will be able to spin something out of it like they always do to support their stance. The problem is that the public has now caught on to their game.

To, Read the Report Mr. Frates, Just what report are you reading? In the Summary of the OACT Memorandum it does in fact "dispute" the CBO, findings on deficit reductions by stating that does not have enough "expertise" to confirm the "tax impacts" on the CBO estimated deficit reductions. In the same paragraph in the Summary Section the Office of the Actuary goes on to state that the the separate House Bill HR3961, that would increase Medicare spending by 241 billion dollars, are not included in the CBO deficit reduction estimates which is a pretty clear way of saying that the Office of the Actuary has concluded that the additional 241 billion dollars in spending should have been included in the CBO's deficit analysis but were not.

Many of you are just not getting it, pointing out that this bill may save Medicare some money, or will reduce the deficit is irrelevant. What this report is saying is that the House bill will ADD to the nation's total health care spending, while obama and the Democrats are saying that the spending path we are currently on is unsustainable. So their solution is to INCREASE spending?

Good article, thanks. But I don't think that will stop Obama and the liberals from doing it any way. They are hellbent on spending $1.2 trillion dollars no matter the outcome. Oh, by the way in 2020-2030 the deficit gets worse. Why? Obama is funding 7 years of healthcare with 10 years of taxes in 2010-2020. After that, same amount of taxes for 10 years. Oh I forgot, they will just cut health care services in that decade to account for the smaller pool of money. If you believe that I got a bridge for sale. Our deficit, along with our economy will explode even more. America, you were a great country while it lasted, now for the decline.

Covering more people will always cost more than covering fewer. The claim put forth is simply, through taxes and some reforms we can make a modest reduction in the deficit and expand coverage. The CBO agrees that this is what will happen as does this CMS report. Also, as to the pg. 10 "summary" are we really calling increased costs due to extended life-expectancy a negative because they don't save money???

When ever the fact that health care cost for Joe taxpayer are going to continue to rise comes to light somebody always points to the CBO saying that the deficit will go down. The whole point behind health care reform was not to get more people covered or cut the deficit. It was, as Obama hhas said to bend the curve, to save the ave family $2500 a year.
Clearly the Dems failed badly to keep the promise to reduce costs. Go back the the drawing board and start over. Or better yet prove you can fix Medicare first then try something a little bit bigger.

'What this report is saying is that the House bill will ADD to the nation's total health care spending, while obama and the Democrats are saying that the spending path we are currently on is unsustainable. So their solution is to INCREASE spending?"
Posted By: patriot | November 14, 2009 at 05:30 PM
---------------------------------------------------
Patriot: Isn't that how Obama has handled all of the problems he campaigned to fix in this country? Spend money we don't have. Spend money we don't have. And spend money we don't have.
I guess when you succeed solely by receiving government handouts of other people's money, it seems the perfect solution to any problem is to just keep spending other people's money.
I think "Read the Report" is one of those people too. Don't worry, we haven't forgotten this never-ending fountain of money you Dems think the "high income individuals" have. The problem is if you take all of their money, the hard working middle class ends up with nothing because it's those "high income individuals" who are buying the boats, houses, cars, vacation homes, going to restaurants, theatres, casinos, shopping, etc. that provide us jobs and the opportunity to succeed.
Of course I guess we could all get government jobs because that will be all that's left in this country come 2012 -- government jobs and jobs through union contractors who work for the government.

Did I miss something? I thought the whole point of this failed healthcare reform attempt was to reduce costs. How can the Democrats take themselves seriously when the rest of America is rolling around on the floor laughing their heads off??? What a group of nitwits!!!

To beging with, the House bill is a total government takeover of healthcare. Nothing in the bill is the truth except for the fact that if you don't buy healthcare you will pay a fine or go to jail. The proposed costs are so under reported that it's a joke. The CBO has already been warned by Obama to show that the costs are less than they will actually turn out to be.
Anything that comes from Obama's or Pelosi's mouth is a LIE. You cannot trust Obama or anyone in Congress. Thay are a liars, cheats and thieves.
The best thing we can do is to vote everyone out of the House and the Senate and start new.
As for Obama, he hates this country, he hates all the people. He is robbing us blind so that he can take us into the New World Order.
Obama is a usurper and needs to be impeached NOW!

How DUMB is Congress? -------- WE have the best health care in the world ---- and they want to screw it up - yes we can improve it. make it competitive --- get government out of health care - not in it. ----- Fix the trial lawyers and make them pay for losing frivolus suits.

The only way to curb costs is to cap premiums and mandate benefit levels. Capping premiums would cause insurance companies to reduce payment arrangements with providers. Today, the average annual increase for providers is 12-17%. If a national medical malpractice insurance program, like the current flood insurance program, could be established, the rates should be reduced dramatically. That should make up the revenue difference for providers.

Here is an example of how the "best health care system" in the world works, a man is forced to leave his family, and expose them to the possibility of growing up with no father, as reported in Andrew Sullivan's column:

"Mark Johnson reports:
56 days .?.?. 55 days .?.?. 54 days .?.?. Chelsea Caudle began signing her text messages this summer with a countdown. At 14 years old, she knew no better way to express what was coming. Day Zero was to be Oct. 7, the day Dad left for Army basic training in Fort Jackson, S.C. He was moving 950 miles from their home in Watertown, 950 miles from Mom. He was leaving, even though Mom was sick with ovarian cancer. Even though he had been at her side through two long, miserable rounds of chemotherapy. Even though she now faced the likelihood of a third. In fact, Dad was leaving because Mom was sick.
In March, he was laid off from his job as a raw materials coordinator for a plastics company called PolyOne, where he'd worked for 20 years. His severance package had provided several months' salary, but by August the paychecks were winding down. Soon the cost of his family health coverage was going to triple, then a few months after that, nearly triple again. They needed coverage so Mom could fight her cancer. Dad's solution: a four-year hitch in the Army."

The National debt is at this point a mute issue. Obamanomics has already broke the bank. any additional debt will be paid off by our Great Grandchildren. The libral left is on what they perseeve to be the only track in town. Our majority public opinion has zero influence in the effort to stop the train before it wrecks. Tea parties across America, thousands of americans protesting what they perseeve to be an all out assalt on our liberties and runnaway spending. I pray that someday soon the hunnymoon will be over and America as a whole wakes up before this train jumps the track.

"The only way to curb costs is to cap premiums and mandate benefit levels."

The only problem is that any time we try to control the cost of health care, by establishing premium caps (and mandate benefit levels), the Teabagger party will start screaming about a "government takeover", "rationing care" and "socialized medicines".

By design, these charges have no actual meaning, therefore they can never be refuted.

If you are saying is that the Democrat plans are too conservative and do not go far enough, I would have to agree with you.

andreams continues:

"Capping premiums would cause insurance companies to reduce payment arrangements with providers. Today, the average annual increase for providers is 12-17%. If a national medical malpractice insurance program, like the current flood insurance program, could be established, the rates should be reduced dramatically."

Unfortunately, this is wishful thinking. The CBO, in response to an inquiry by Orrin Hatch, have already estimated the potential savings, direct and indirect (including defensive medicine) of instituting "tort reform" like that the Republicans are always talking about.

You know much the CBO says can be saved by Tort reform? Up to 0.5% of the national medical expenditures!

In other words, the savings of the Republican ideas are inconsequential.

And exactly what percent of the national deficit is attributable to Obama's spending? Factual references required.

The fact is that the record deficit this year is due to the economic catastrophe, announced by no less than Republican president George Bush and his Secretary of the Treasury Paulson, on September 19, 2008!

Notice that politico didn't give a summary of the reports overall conclusion. You can tell bias when the author is posting summary of pages rather then the whole document. Cherry picking the information that pushes the framed story created by the Republicans. Apparently he Frates considers a increase of life expectancy to expensive to cover. 4% of the working will be drop by employer and have to buy through the exchange. Medicare Advantage funnels money through Insurance companies wasting tax payers dollars, 30.4 million will gain insurance, cost burden is relieved from hospitals. the bill is deficit neutral - that is not what the report is analyzing. The report is analyzing economic impact not deficit Impact. Plus there is an acknowledgement that savings are hard to examine because none of this has been done before in the U.S. It is the government duty to promote the general welfare has stated in the U.S. Constitution. Just allowing Americans to die is not an option. Yes things are bad, but doing nothing will be worse latter on. Tort reform saves little, allowing companies to sell across state lines will just allow Insurance companies to move to the state with the most lax state tax laws. The bare minimum is unacceptable and the political divisiveness of the GOP stoked Tea Partiers with your nazi chants will not solve anything. GOP don't want healthcare reform, they wouldn't even vote for there own bill if they knew it would pass.

What they didn't factor in is people like me-I am self employed an have been paying for my own insurance for 15+years(my HSA for my family of four only costs me $4500 in premiums a year). If this bill passes with the guarantee issue, I will drop my coverage, not pay the fine, and let them come after me!

Quit looking at numbers, deficits, etc. The easy solution is to treat health insurance like any other insurance you purchase(auto, life, home, etc.). It is there to protect you against catastrophic loses, not pay for you to purchase goods or services. And if you think anyone in America doesn't have access to health care, talk to an ER physician!

I know! I'm bored with nothing else to do-but wait, Eureka-I have an idea. Let's spend $1 billion and hire a boat load of people to combat Medicare(and Medicaid) fraud and if we recoup the estimated $47 billion a year in waste, we can set that aside and use it to pay for the people who are truly hurting instead of trying to revamp the whole system under the pretense of helping those who need it. Anyone who thinks this bill or idea is about helping those who need it, need to take a hard look in the mirror. Get off your couch and go help those in need and quit looking to the Federal Government to fix everything.

You libs keep talking up the tax stream from the rich. Did you forget that current tax revinue from the rich is down over 30 % currently? Dont' they teach math a Harvard or Yale? Oh yea, the CBO(without the public option) gave the Backus bill a thumbs up not this monstrocity. Since when is it constitutional to have a head tax?

Hmm... it costs more too cover more people. News at 11.
I won't go as far as to say this is deceptive reporting... maybe it's just off-the-cuff. But it seems pretty clear that this report goes into depth on spending, but doesn't consider whether the House bill pays for that additional spending. So, it is of little value as a comparison to CBO numbers or determining fiscal soundness of the House bill.
I believe this is a non-story.

Our politicians need to read this bill.Most politicians never read a bill, they have an aide read it and give them a summary. How do you summarize a bill like this that is 1990 pages long? You can't. This is why we need to encourage our politicians to read everything that they sign into law. This is the job we elected them to do. They need to remember they serve the people, not the other way around. Our country was founded to alleviate excessive government control, yet 233 years later we have the same thing with the Patriot Act that trampled all over The Constitution and now we are passing socialized medicine. "Socialized" medicine, meaning government controlled. Didn't we go to war and lose a lot of good Americans fighting socialism, yet now we embrace it? Since the Patriot Act took away freedom of speech, I think I'll stop here before I get labeled a "domestic terrorist" when just a few years ago I would have been considered a patriot.
There is a grassroots non-partisan movement in California encouraging politicians to actually read the bills before signing them, in other words, do their job. If you agree with this and would like more information, visit their website. www.HonorInOffice.org

I'm beginning to think that doing nothing might actually be better than anything that has been proposed to date. Maybe we should start with trying to root out the fraud and waste from Medicare and THEN starting adding people to the system.

Don't you just love the argument.."Every other country has socialized health care, so we should too!" Do they not realize that most Americans have absolutely no desire to be like Europe or Cuba or Russia, etcc? We didn't become the greatest country by being a welfare state. Who are they trying to kid??

The one thing that "healthcare reform" certainly does NOT do is offer "choice"! Quite the contrary. This was made abundantly clear this past Friday in an Op-Ed that appeared Friday, December 13, 2009 in The Wall Street Journal by Andrew Heinze, a registered Democrat from New York. Following are a few words from that article:
"I'm a registered Democrat living in New York City, and I buy my own health insurance. But now, having seen the health-care reform bill that passed the House, I'm preparing for life without health insurance. And unless I'm the only person covered under the Empire Blue Cross/Blue Shield "Tradition Plus" plan, a lot of other people will end up just like me, uninsured.
I will gain one thing, though—an annual fine for losing my insurance. The exact amount of that fine isn't clear yet, but so far it looks like I'll be paying about the same amount—$2,000 a year—for having no insurance as I do now for having it."
Mr. Heinze goes on to describe the fact that, today, his minimum cost for a comprehensive major medical plan is $13,000 per year. His cost on a plan that just covers hospital stays is $2,000 per year. Therefore, he chose the less expensive option. He correctly points out that the $11,000 difference would pay for A LOT of doctor visits should that become necessary. Today Mr. Heinze has a CHOICE between these two alternatives. Under the provisions of the healthcare bill passed in The House of Representatives on Saturday, November 7, that CHOICE will NO LONGER EXIST!!!
The irony here is ultra liberal Democrats want to ensure "choice" for abortion in a bill that, in every other respect, takes away freedom of choice from individuals and transfers that choice to the federal government.
Healthcare reform is something that needs to be done correctly. Another irony is the fact that President Obama wants us to rush into this very important decision while, at the same time, the General that The President personally chose to run the war in Afganistan has asked for more troops MONTHS AGO, but when it comes to that decision it's quite a different story. No rush there according to Obama! The White House says they need to take the time to get it RIGHT! Go figure!!!
Given the fact that a recent poll indicates the vast majority of Americans believe that JOBS should be the number 1 priorty for the administration in Washington while only 17% believe that to be the case on the subject of healthcare reform, it appears to me that both Martha Coakley and President Obama have their priorities, shall we say, BASS ACKWARDS!!!
For the record, I am also a REGISTERED DEMOCRAT!

Seeing the forest and big picture !!
To date, out of the earmarked $787bn in stimulus package , roughly $155bn dollars, not sufficient to reverse the trend of jobless rate, have been doled out. But, away from job saving and creation, GDP growth etc, the added value on the stock market alone might stay at roughly $1trillion, which could help us see the forest in light of conclusion of the historic health care and sustainable energy act.
As always, focusing exclusively on up-front cost and subtracting its added value from equation, we will more likely be trapped in a small cage.

""The persons against bill can find or rally for fees to go to EUROPE or CANADA to get affordable decent health care.. It's like PUT UP or SHUT UP. Because we need people to communicate new ideas for Health care. As for your kids don't spend all your money.."""

"""Please put younger people in our government and retire the BLUE HAIRS, Even Moses knew when he was too OLD for the JOB that was bestowed upon him.
""The persons against bill can find or rally for fees to go to EUROPE or CANADA to get affordable decent health care.. It's like PUT UP or SHUT UP. Because we need people to communicate new ideas for Health care. As for your kids don't spend all your money.."""

When will the politicians learn that the only way to make costs come down is heavy competition. Not one insurance company run by the government or several run by the government but many. And also increase the competition by shifting the burden of purchase of health care from the employer to the individual. See if the costs will not come down under those conditions.

Good summary of the report. I'm an actuary and I think the report is reasonable and objective to both sides of the debate. One more point in the report: He says that Medicare will run out of money 5 years later under the proposed cuts (2022 versus 2017). Wait a minute! Our existing system is going to run out of money, in a big way, but we're talking about expanding the system? If this bill passes the Senate in anything like its current form, progressives will be very happy for about 3 or 4 years. Then they will be very unhappy because we are all going to go BROKE, democrats, republicans and independents alike will all be on the same liferaft.

Don't worry, the Democrats will spin this in a way that suits them except that the public is aware of what they're doing now. I don't understand Congress wanting to add another huge entitlement program when Medicare will run out of funds in the next 10 years. By adding healthcare there is no way there will be enough money in the future to save it.

"an actuarial report prepared by the Centers for Medicare and Medicaid Services." cms IS OWNED AND OPERATED BY THE HEALTH KILLER INDUSTRY THAT OWNS AND OPERATES THE WHITE HOUSE AND CONGRESS, IN PARTICULAR THE DRUG INDUSTRY THAT HAS THE HUSBAND OF THE DIRECTOR OF CMS, AMY HALL, AS ITS NUMBER TWO LOBBYIST...PhARMA.. THEIR MOTTO: BILLIONS FOR BRIBERY BUT NOT ONE CENT FOR REAL PEOPLE.

Social Security should have a opt out plan where if someone opts out they would still pay about 40% but they would get to keep the rest. I would take the money because there is no way that it is going to last by the time I retire.

Social Security should have a opt out plan where if someone opts out they would still pay about 40% but they would get to keep the rest. I would take the money because there is no way that it is going to last by the time I retire.